Waaree Energies, which is set to launch its IPO, next week on Monday, October 21, has been able to attract a stellar demand in the grey market. The solar PV module player has been able to draw interest from not just investors, but even the analysts even the price band was officially announced
The unofficial market has been going gung-ho over the solar-theme player. Waaree Energies is commanding a grey market premium (GMP) of Rs 1,300-1,350, suggesting a listing pop of around 90 per cent over the upper end of the price band. The company’s GMP may rise further as the issue inches closer.
Waaree Energies will be selling its shares in the price band of Rs 1,427-1,503 apiece. Investors can apply for a minimum of nine shares and its multiples thereafter. It is looking to raise Rs 4,321.44 crore via IPO, which includes a fresh share sale of Rs 3,600 crore and an offer-for-sale (OFS) of up to 48 lakh equity shares by its promoter and existing shareholder.
Waaree Energies is India’s largest manufacturer and exporter of solar modules. Incorporated in December 1990, Waaree Energies is an Indian manufacturer of solar PV modules with an aggregate installed capacity of 12 GW. The product portfolio of solar energy products consists of the PV modules such as multicrystalline modules; monocrystalline modules; and TopCon modules.
Over FY20-24, its installed capacity has zoomed 6 times to 13.3GW (2GW in FY21), by far the highest amongst its peers, transpiring into a respectable 21 per cent share of the domestic market and a healthy 44 per cent share in exports of solar modules from India. WEL is setting up a 11.4GW integrated manufacturing facility, said Monarch Networth Capital in its IPO note.
“This integration will enhance Waaree’s operational efficiency, reduce costs and the dependence on external suppliers. With solar energy emerging as a key global theme in the transition to renewable energy, WEL is best placed to capitalize on the growing opportunity given its leading market share, strong financials, and continued focus on innovation and sustainability,” it added with a ‘subscribe’ rating.
The company has been garnering high demand in the private market or the unlisted market since the issue has been announced. It has already delivered multibagger returns to the investors in the last two years but dealers active in the pre-IPO market believe that the company has strong growth potentials and will command a premium over its peers.
Sandip Ginodia, CEO of Kolkata-based Altius Investech said that the stock has zoomed sharply to Rs 2,700-2,800 levels in the unlisted market, which is fully priced if one considers the price band and GMP. The company undertook a private placement in May 2022 at Rs 225 apiece and the stock has delivered stellar of 10-11x returns since then.
“Renewable energy is a buzzing theme. Waaree Energies is a top-notch name in solar space and its execution capacity is superb. The company has a robust order book and financials of the company suggest that the company will continue to command a premium in the coming time,” Ginodia added. One should note the pre-IPO shares come in with a 6-month lock-in post listing.
The net proceeds from the fresh issue shall be utilized towards the cost of establishing the 6GW of ingot wafer, solar cell and solar PV module manufacturing facility in Odisha and general corporate purposes. It has two facilities located in Surat, Tumb, Nandigram, and Chikhli in Gujarat, India.
Waaree Energies reported a net profit of Rs 401.13 crore with a revenue of Rs 3,496.41 crore for the three-months ended on June 30, 2024. The company reported a net profit of Rs 1,274.38 crore with a revenue of Rs 11,632.76 crore for the financial year ended on March 31, 2024.
